Fraudulent devices rule effectively abolished in UK shipping case

In brief – Insurers should consider effect of the Versloot decision on marine insurance in Australia

The Supreme Court of the United Kingdom has refined the scope of the fraudulent claims rule in Versloot Dredging BV v HDI Gerling Industrie Versicherung AG [2016] UKSC 45 by determining that the rule does not apply to collateral lies told by the insured to embellish their claim but which are otherwise immaterial to the insured's right of recovery under the policy.

We have previously reported on the first instance decision of Popplewell J in the Commercial Court in our November 2013 article Court rejects insurance claim of ship owners because of "fraudulent device" used in making claim, and the Court of Appeal decision which confirmed the fraudulent device rule adopted at first instance in our November 2014 article Fraudulent devices rule confirmed in shipping case by England's Court of Appeal. The majority of the Supreme Court has now overturned the decision of